Substandard performance and failure to meet objectives in capital investment has been a major contribution to the catastrophic decline in the profitability of industry in the UK. The structure of a project is described and the differences between a project and ongoing operations are discussed. An approach to capital investment analysis is described which is based on rate of cashflow and which relates closely to the actual events that occur. The nature and character of the risks involved are examined and a variety of problems discussed. The inevitability of the learning process is pointed out together with the benefits of structuring this learning. Some of the human and organizational imperatives required for success are defined and the need for a knowledge-based approach to the main project disciplines is advocated. These disciplines are outlined together with some discussion of their inter-relations. The operational techniques which ensure a total, and avoid a fragmented, approach to managing a project are briefly described and the importance of top management involvement is emphasized. By taking the steps advocated in the paper the risks inherent in capital investment projects can be reduced to an acceptable level.
